VENTURE CAPITALIST
In this era of start-ups, millions of educated people pursue their profession successfully but later decide to pursue entrepreneurship. A successful venture requires the right capital. Building your own business without the necessary money can be one of the setbacks in accomplishing your dreams. This is where you need Venture Capitalist to make your dreams come true and make you succeed.
What is Venture Capital?
Venture capital is the method of start-up funding companies that have strong growth potential. The majority of venture capital comes from professionally-managed public or private firms (venture capitalists).
Who are Venture Capitalists?
Venture Capitalists are private equity investors who invest in promising start-up companies or young businesses with high growth potential but are also at high risk. The beneficiary companies are usually small or medium-sized firms requiring early-stage funding to develop technology or products with high growth rate potential.
Venture Capitalism in India
The Indian government in 2015 declared an investor-friendly budget with provisions and funds earmarked for start-up funding in India. Also, a start-up fund worth Rs 10,000 crore is being proposed by the government. This is encouraging news, although angel investors and venture capitalists in India have kept the start-up ecosystem thriving in India to date and will continue to do so in times to come.
Best ways to get Venture Capitalists
Outside funding is a major stepping stone for entrepreneurs who are just starting up their businesses. In this competing world of business, start-ups wanting financial assistance and actually receiving it are two different things. If you think your start-up might be ready to go after venture capital, here are some tips on making your final decision and getting the process started.
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Decide your goals
Venture Capitalists want to see your potential in making smart decisions. They might not want to fund you if you don’t demonstrate a strong money mindset and innovative goals with high growth potential. So the first step is in determining your goal and its growth in the long run.
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Pick the right Venture Capitalist Firm.
The primary concern in raising the Venture Capitalists Funding is picking the right firm. The entrepreneur needs to do market research on all the venture capital firms, check the options available, and choose the right firm to help develop your business. You need to research the latest happenings of the VC firm, new technologies, the status and development of the firm, and if the firm is best suited for your business.
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Prepare proper documents for Venture Capitalists.
The foremost step should be in creating a summary of your goal to catch their attention. Your summary must be easily understandable. It should contain an overview of the most important technical details from your business plan, how you plan to grow your business, your financial status, how you will use the investor’s money and how investors will get a return. The final step is how well you present it.
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Highlight the Team and Talent.
Investors look for a capable management team and talent before investing in your business. You need to build a solid team with experienced talent and present it to the Venture Capitalists. This helps them determine whether or not they’ll get their desired return.
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Patent your ideas
If your business relies on new technology or innovative new ideas, file for a patent before you reach the investor. Your patent can determine whether your idea is unique or if it already exists. If your idea is new, filing a patent makes sure nobody uses your concept for their benefit.
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Set your Budget
Set a budget and raise capital only when you don’t have the necessary funds. Before asking for funds, determine precisely how much you need to meet those objectives. It would be best to ask based upon that budget and not what you think you can raise.
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Review the Term Sheet carefully.
Once your deal is finalized, the Venture Capitalists provide you with a Term Sheet containing full details of the agreement. This might include details of how much of your company they hold and how much they will invest. Make sure your lawyer goes through all the terms carefully to avoid any future disagreements.
Closure
Venture Capital provides capital to build business enterprises with an opportunity to expand. They can help build strategies, technical assistance, resources, etc., to make a business successful. Besides startup funding in India, venture capital is also a source of guidance, expertise, and consultation.